Conservative Economic Policies Still Driving America Off A Cliff

President Obama's recent statements in advance of the State of the Union have centered around supporting middle class families through tax cuts, deficit reduction and job creation. But not very much job creation. There will be help for families where both parents are working, not so much for families where one or both parents can't find work. And to heck with the environment, which supports everyone's breathing, eating and drinking.

A three year spending freeze tops this list of conservative policies, time-tested for their failure to help anyone but the already wealthy. I don't even know what to say about that last one except that it still won't get Republicans to say nice things about Democrats, and it may have already cost Obama my vote in 2012. Even if he doesn't carry through with a freeze, I'm not thrilled with a Democratic president taking the position that the United States can't afford jobs and social justice anymore.

These approaches probably won't inspire anyone (though they may cut my student loan payments), particularly not the young voters Obama so notably brought to the polls, and they overlook the role projects such as public transportation could play in helping resolve all these problems. (I bring up public transit because I've recently stumbled upon a wealth of information about its positive multiplier effects on job creation and quality of life, even though a similar case could be made for the benefit of supporting other Great Society or Apollo Program type projects.)

Indeed, the sum of these recent proposals are a total repudiation of liberal economic theory, the Keynesian exhortation for government to make up for decreases in investment demand for more work by creating demand for jobs directly. But though the Obama administration has tried everything to coax them out to play, investors have walked away from the economic table and not come back, leaving everyone else fighting over a shrinking share of a shrinking economy.

Perhaps worst of all, favoring tax cuts and deficit reduction over job creation is just more of the usual class-warfare against the poor.

A once-yearly tax rebate is of limited help people who live paycheck to paycheck, and no help to those who don't have a taxable income in the first place. This question of who gets help, who's considered worthy of help, is a test of basic human decency that the United States is failing, whether the terms used to defend this ethical blight are overtly contemptuous or politely neutral.

The poor need income. If they're ever supposed to get out of poverty, and if the middle class is to be able to solidify their gains, they need sufficient demand for employment that they can earn living wage salaries.

More education isn't the answer. On the one hand because not everyone is can go to, or is suited for, college and those people still need decent jobs, and on the other, because public funding for education has been cut. This latter means, as George Lakoff explained in a discussion of California's disastrous budget planning, that the benefits to employers and the state of having a higher-earning, better-educated workforce is being shouldered entirely by students and their families, many of whom won't be able to cover that additional cost.

So, about that public transit ...

In spite of the fact that a dollar spent on public transportation creates nearly twice as much employment as a dollar spent on highways, the House jobs bill spends three times as much on highways as on transit.

Considering that the US government has long prioritized economic growth over employment, which in turn prioritizes the small investor class over the majority working class, the spending ratio shouldn't be surprising. But the rationale doesn't hold up very well from a job creation perspective.

First, though it may be temporary, the size of the US car fleet shrunk for the first time in 60 years. Perhaps because people are flocking to cities. Perhaps because driving isn't as big a deal to the kids these days. Perhaps because gas prices have been on a crazy roller coaster for nearly a decade now. Who knows. One thing's for sure, when not even the wildly popular Cash for Clunkers program could sustain continued growth of the US domestic car fleet, Americans' transportation priorities have changed and the government needs to keep up.

Second, as with the education example, public transportation provides so many benefits to even those who don't use it that it could be said that "a train running a profit is charging too much" to its individual riders. By decreasing congestion, decreasing health damage from pollution, providing reliable backup transportation for car owners and allowing employers to access the talents of people without cars, among other things, public transit improves the lives of entire communities.

It's entirely appropriate to pay for services that benefit everyone out of public funds.

Third, the devastation of the auto industry has left regions like Michigan awash in unemployed industrial talent. A revitalization of public transit creating demand for trains, buses, monitoring equipment, tracks and other components would put more of that talent to work. People who need work building things, meet things that need to get built. Perfect.

It's complicated, but simple

Not only does land use take up less of the purchasing dollar of transit spending as opposed to highway funds, more components need to get built and maintained. Projects that require more manufacturing, it should follow, create more potential for jobs.

It was easy to see this when I worked for Boeing. Building any complex piece of machinery requires far more than button-pushing. Beyond jobs for machinists, the line workers had to inspect and test each component, bond and surface treat parts that couldn't be machine-finished, service and program automated machine tools, wire and install electronic gear, and on it went. Most of those jobs were performed by people with high school educations, or perhaps two year degrees, and in general, even the most basic of these jobs were better paid and more challenging than entry-level office work.

Though to support the manufacturing of a Boeing plane, which is a lot more like a train than a strip of highway, many other support services were required. Education was an important one; every line worker needed to be trained and periodically re-certified in skills relevant to their job to maintain high safety and quality standards, so Boeing employed a lot of teachers. They also needed accountants, engineers, lawyers, human resources professionals, advanced computer programmers, network administrators, managers, etc., etc., etc.

It was said at Boeing, where many people worked for stretches measured in decades, that you could find a job at almost any profession somewhere in the company. It was an engine for a type of prosperity and class mobility, for people of many educational levels and skills, that an economy founded on extraction or non-essential services would never produce.

A lot goes into a modern road or bridge, but it's an order of magnitude distant from the quantity and types of work needed to produce even an engine and chassis.

Necessities

People have always needed food, clothing and shelter. Since we began cooking our food and staying up past sundown, we've also needed energy.

For a civilization like ours, transportation and telecommunications start taking on the character of necessities. It's hard to get a job without a phone or a way to travel farther than you can walk in half an hour these days if you live in an industrialized nation. So provisionally add those to the list.

Beyond essential goods and services, all else in an economy is negotiable. Government policy in today's United States, however, seems to regard only the financial sector as essential. This bipartisan conceit overturns the millenia worth of human experience where people got along just fine without credit default swaps and collateralized debt obligations.

No, the financial sector is now so important that the foundations of a good economy and the majority of the people in it can be neglected on its behalf.

Perhaps the president and Congress will take a harder look at their priorities going into an election year. They should know very well that the public's view of the economy often begins and ends with their own fortunes and those of the people they know.

I could be tempted to say that the proposed cap on student loan payments was a great step, but I don't know how many jobs it will create for people who never went to college and probably won't. A tax credit for childcare will help families that can afford healthcare, it may create a few more jobs in daycare services, but it won't help people who can't afford those services in the first place and child care rarely creates family wage jobs.

Spending freezes and cuts for deficit reduction, on the other hand, will harm public health, prevent police, fire, library and educational services from meeting public needs at the same levels, and will probably reduce the capacity of government at every level to enforce safety, fraud and environmental regulations. Very few members of the public actually want to cut such spending in their communities; much in the way that even when people take a dim view of national education, they usually like their own community's schools. But they've also been given little reason to believe that the cream of their taxes is being spent for their benefit, rather than for wars and banking institutions that are foreclosing on their neighbors, and Obama seems in no hurry to connect those dots.

Anyway, I can't say I'm looking forward to the State of the Union. I'm not getting the sense that the administration is in tune with the country's needs in a way that would allow them to meaningfully address the frustrations they're hearing.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future